STAR TEC's startups
One of the area’s prominent business incubators calls itself an accelerator with tenants that are closer to taking off.
By KRIS HUNDLEY
Published August 6, 2006
Tonya Clark runs a low-rent space for startup businesses. But don’t call her operation an “incubator” and don’t come looking for just bargain-priced square footage.
“We’re not just cheap rent,’’ Clark said — repeatedly — as she
STAR TEC tenants Alaka’i Consulting and Engineering I.D. Rank Security Ready Alert Services Scalable Network Technologies Source: STAR TEC |
described the 2-year-old STAR Technology Enterprise Center, part of Largo’s Young-Rainey STAR Center on Bryan Dairy Road.
Business incubators, all the rage during the dot-com boom of the late 1990s, were conceived as low-budget operations where young entrepreneurs could mingle, get mentored and spin their brainstorms into gold. Even for-profit companies tried to get into the act, opening incubators in hopes of cashing in on their successful offspring.
Then the boom went bust, the opportunities for new companies to go public dried up and venture capital became more discriminating. A tech-whiz with a great idea had a hard time getting a cup of coffee, much less a furnished office and community cappuccino machine
As the economy changed, so too did the concept of the incubator. By the time STAR TEC opened its doors in November 2004, it deliberately called itself an accelerator.
“An incubator is for people who have ideas,’’ said Clark, who has been executive director of the nonprofit operation since its inception. “We’re looking for people with products, customers and revenues.’’
Incubators have not gone completely out of style. The Tampa Bay Technology Incubator, which opened in 2002 and expanded in 2005, is on the University of South Florida’s Tampa campus and fully leased with 15 tenants, most of them in the life sciences. About a dozen incubators are in Florida and nearly 1,000 nationwide.
By being more discerning and focused on its mission — to nurture new technology manufacturing companies in the area — STAR TEC has grown slowly. The center, housed in a building where triggers for nuclear weapons were tested, has six tenants. Three are entering their second year with STAR TEC; the rest joined over the past few months.
Clark, who previously worked with the Greater Tampa Chamber of Commerce’s Committee of 100, said the group initially accepted one out of seven applicants. Today, it can take a year for companies to get through screening. Most are winnowed out at the start.
“I’m doing a better job of initial screening, before people even get to the official vetting,’’ she said, adding that a $500 application fee helped narrow the field.
Clark said she has four openings for office use and one manufacturing space available at STAR TEC, at rents of $2.50 a square foot including utilities. That compares to commercial rates of $7 to $11 per square foot at the adjacent STAR Center.
The STAR Center is a former Department of Energy facility that is county-owned and about 95 percent leased to companies in the manufacturing and technology fields.
Among applicants who receive a polite yet firm rejection from Clark are entrepreneurs who are simply looking for cheap manufacturing space, like the slew of window-film and hurricane-shutter makers who contacted her after last year’s hurricanes.
Then there are the engineers employed full-time by local companies but eager to find a space where they can tinker with their dream projects at night.
“They have to be here full-time,’’ she said of the owner/operators who run her tenant companies. They include people like Happy Rideout , chief executive of Ready Alert Services, which joined STAR TEC in November 2004.
Rideout and his vice president of sales and marketing, Bob Austin, were working out of their homes and had four customers for their Web-based emergency notification system when they got the invitation to join STAR TEC. Today they have 40 customers, from private schools to the Pinellas County Emergency Management Services and a staff of four full-time and four part-time workers.
“STAR TEC has given us a home base and the bricks and mortar,’’ Rideout said as he sat in the crowded single room that houses his growing business. “But the extra icing is the contacts and the advisory committees. You get instant credibility being part of STAR TEC. Doors open.’’
Once a company is approved by STAR TEC’s vetting committee, members of the group’s board, headed by Edmund O’Carroll, senior vice president of the Bank of St. Petersburg, pinpoint its areas of weakness. Then they pluck experienced volunteers from the community to serve on the tenant’s advisory board.
Clark said the boards are more effective in offering assistance than the occasional mentoring that used to take place.
“With mentoring, we weren’t setting benchmarks and there was no way to measure progress,’’ she said.
By assigning outsiders to act as an informal board of directors for its companies, STAR TEC is protecting its investment. The nonprofit group, which is funded through federal, state and county grants and private contributions, takes a 1 percent ownership stake in each of its tenants.
(USF’s incubator, meanwhile, charges market-rate rents, but does not take an equity share in its tenants.)
Though Clark expects STAR TEC will become self-sustaining in three or four years, its investments have not reaped dividends. The group’s only graduate, ImagiNail, moved out a year ago because it needed more manufacturing space but it is still finding its footing financially.
Netta Selego, ImagiNail’s vice president of systems and technology, said the Clearwater company never would have survived without early manufacturing help at STAR TEC.
“They had space, a ready part-time work force, even a forklift we could use,’’ said Selego, whose company makes printers for fashion nail designs. “For our first two years, we were selling more in Japan and Europe than in the U.S. and STAR TEC kept us in the game.’’
STAR TEC’s tenants, meanwhile, give Clark credit for linking them up with vendors, angel investors, even experts on exporting to Saudi Arabia.
“Our East Coast operations would not have been near what they are now without STAR TEC,’’ said Frank Tortorelli, vice president of Los Angeles-based Scalable Network Technologies, which sells its communication network modeling software to 150 customers, including MacDill’s SoCom and the U.S. Army.
David Boubion, president of I.D. Rank Security, said it has met potential partners, customers and investors since joining STAR TEC in June.
“Every week there has been some activity that shows this is really, truly a partnership here,’’ said Boubion, who has 20 years experience in computer security in Europe. “They’re working with us to move our business along.’’
Clark, meanwhile, has no illusions about the difficulty of building a business. She’s learned that finding top management for startups is nearly as difficult as finding money.
“Without funding, you can’t get top caliber talent,’’ she said. “And without talent, you can’t get the funding.’’
She has discovered that, at STAR TEC at least, budding entrepreneurs don’t quite fit the stereotype of Gen-X hipsters.
“We’re seeing entrepreneurs who have left positions and are starting a second career,’’ Clark, who is 42, said of her tenants. “They are more seasoned, so the resources they need are very different.”
Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.